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Strategies & Market Trends : Value Investing

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To: Madharry who wrote (38846)	8/17/2010 9:47:44 AM
From: Madharry	1 Recommendation Read Replies (1) of 78744

listening to GFRE call. demand for bromine continues to be robust. 2nd quarter they operated at 100% of capacity. normal capacity is 80% and that is what they are at now. they renegotiated some contracts. they have seen some increase in raw materials but they expect to transfer those costs to end users over time. pesticide use increasing and so it for oil and gas industry. commercial production of wastewater products is ahead of schedule and getting good feedback. expect to contribute $10 million a year to revenues. So far I continue to like what management is saying they dont seem to be overpromising anything. its real difficult to understand when the chinese guy is speaking english. ( i suppose .47 will be the peak earnings quarter this year. but if they do even .8* .47 or .38 for the next two quarters it still shapes up as a pretty good year about $1.46.) now it sounds like bla bla bla about additional acquisitions and financing. Q&A: Oppenheimer- guidance-in light of strong second quarter why is full year guidance unchanged? are you overly conservative or are you concerned about something? expectation from future bromine pricing? capacity of recent acquisition in current year? we are always conservative. we think price will stabilize but there is likelihood may increase higher. 75% capacity for rest of year. new acquisiton will be on board end of august so capacity over 4 months will only be 18%. what are market dynamics that caused stablizing at 19,000? a little more supply, prices dont go up non stop they go up and then correct. potential for increase in 2nd half? increasing demand, 2nd quarter if usually peak season for production so there is more supply in 2nd quarter than rest of year. govt restrictions on bromine pricing. chance that govt will issue more licenses to increase supply? always possible govt will change policy. but most likely to issue to existing players. so they continue their m& a policy. flooding impact? not affected. chemical production? how much bromine used internally? 8%. STRENGTHENING RD EFFORT? very low right now. target goal is 1.5-2% of revenues. big market for pollution control? mercury? nothing specific though. breen murray- 80% utilizaton rate not much more than that is possible. to raise margin they need cost control. rengotiation of contracts? what changed? avg. 19,000 a ton. is that secure for the remainder of the year? 3 month term. Have to stop listening now.

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